As a person's wealth increases we would expect the demand for money to:

Question

Quizplus · Accepted Answer

As a person's wealth increases, the demand for money would still increase but at a rate less than dollar for dollar. This is because as people become wealthier, they tend to hold a smaller proportion of their wealth in liquid form because they have more options for investment and consumption. Therefore, the demand for money may grow at a slower pace than wealth.

As a Person's Wealth Increases We Would Expect the Demand